Late Adopter

There are people who like to buy new products as soon they come on the market.  Then there are people like me on the trailing edge of the adoption curve.  Usually this isn't a problem but occasionally I have regrets that I didn't get on board sooner.  I recently had such regrets regarding digital thermometers.

Prior to this year I had not needed to take my temperature for a long time as I have been fortunate in having generally good health.  However this year because of COVID-19 I have needed to take my temperature many times (among other things my employer requires me to take my temperature before going to work every day).  When this started I looked around and discovered I had two thermometers (both of which I believe were gifts from my mother who properly worried that thermometers were the sort of thing that I would neglect getting for myself).  One was an old fashioned mercury thermometer probably about 35 years old (the instructions are copyright 1983).  The other was a digital thermometer probably about 20 years old give or take (I seem to have lost the instructions).  Unfortunately when I tried it the digital thermometer (a K-jump model 720 sold under the Today's Health brand) didn't work.  Probably because the battery had died over the many years of disuse.

That left the mercury thermometer.   I had some trouble with it too.  Mercury thermometers contain a reservoir of mercury at the base of a narrow glass tube with temperature scale markings.  When you take your temperature thermal expansion forces some of the mercury up the tube.  The higher your temperature the more thermal expansion forcing the mercury higher up into the tube allowing your temperature to be read off.  But the mercury doesn't return to the reservoir by itself even after it cools down.  The thermometer has to be "shaken down" which means shaking (or jerking) the thermometer in such a way as push the mercury back into the reservoir.  Apparently there is a knack to this as I was unable to do it.  Fortunately I figured out (or maybe read about on the internet) an alternative.  By placing the thermometer in its case, placing the case in a sock and rapidly spinning the sock I was able to force the mercury back into its reservoir. This allowed me to use the mercury thermometer.

Although capable of doing the job (of measuring your temperature) mercury thermometers have some drawbacks.  According to the instructions they need to be in your mouth for four minutes to obtain an accurate reading.  I am not sure this is really necessary but I didn't experiment with shorter times.  The shaking down process consumes some more time.  Mercury thermometers are also fragile and a real nuisance if they break because of the mercury.  While using the thermometer daily for several months I actually did drop it a few times but fortunately a short distance onto carpet so it didn't break.  Still breakage is a constant risk.

So eventually I decided to upgrade to a digital thermometer.  I could have tried replacing the battery in the one I had but new ones were cheap enough that this seemed the way to go.  I ended up buying a Vicks SpeedRead thermometer  (model V912BBUSV1) sold online by Walmart.  This was cheap (about $10) and had gotten good customer reviews.  I am quite satisfied with it after a few weeks of use.  The  easy to read display shows your temperature with a resolution of .1 degrees Fahrenheit (the mercury thermometer had similar resolution with scale markings .2 degrees Fahrenheit apart but it was a pain to  read).  I took my temperature with both a couple of times with good agreement (off .2 degrees one time, 0 degrees the other time).  The new digital thermometer is also much faster.  I seem to average around 10 seconds before it beeps announcing that it is ready to read.  This is a little slower than the advertised 8 second best case but better than the 15 second average case in the fine print.  In any case much better than four minutes (or even the 60 seconds claimed by the older model digital thermometer).   

 All in all in this case the new technology seems far superior and I regret not buying a digital thermometer months earlier (assuming I could have found one in stock, apparently they were in short supply for a while).  The main disadvantage of a digital thermometer seems to be that the battery can die.  I don't know if the model I bought will provide a reasonable advance warning that the battery is about to die (and this wouldn't help if the battery dies because of long disuse).  For this reason I plan to keep the mercury thermometer around as backup.  Consumer Reports recommends properly disposing (a bit of a pain in itself) of old mercury thermometers because of the breakage hazard but I don't think the risk is high while it is being stored in its case.

Medicare

I recently applied for Medicare and last Friday I received my Medicare card in the mail. The eligibility age for Social Security has been rising but it is still 65 for Medicare. You have a 7 month window to apply starting the third month before the month you turn 65. So I could have applied back in July but I didn't get around to filing my application until September 30.  

The application process was fairly easy, I was able to apply online through the account that I had already set up. The government has resumed the two factor authentication system that caused me problems before but now can send the security code by email (as an alternative to a text message to my non-existent cell phone). As I recall there were just a couple of tricky parts to the application. The application asked when my current health insurance started. I was pretty sure this was the same day as my employment started (which was in fact the case) but thought I should double check with my employer. Then for some reason I had trouble entering the date on the form and eventually gave up and put it in the additional notes section at the end. The other tricky part of the application was that it asked for the exact form of my name on my social security card which required a trip to my safe deposit box to check.

I quickly got an acknowledgement which stated at least five days would be required for a decision. According to some discussion of this I found on the web five days is optimistic and in fact the note accepting my application was dated October 15. Since I expect my case was about as straightforward as possible it appears you should allow at least two weeks. The acceptance note was posted to my online account and said a letter would follow. The letter arrived October 24 and the card sent separately arrived October 25. It appears from the card that my coverage actually started at the beginning of October (as opposed to the day I turned 65).

So it takes almost a month to get your card even when everything goes well. This didn't matter much in my case but if you need coverage as soon as you turn 65 or if you suspect your decision might be held up for some reason I would recommend getting your application in as soon as possible.

Since I am still working with medical insurance from my employer it seemed best to just apply for Medicare Part A which is free. When I stop getting coverage from my current employer I will have an eight month window to sign up for the other parts without penalty (otherwise there is a penalty in the form of higher monthly premiums depending on the length of the coverage gap as the government doesn't want you waiting until you get sick to sign up).          

Take Back Day

The DEA periodically (every six months or so) sponsors "Take Back Days" on which people can safely dispose of unwanted prescription drugs.  Last Saturday, October 27, was the most recent.  I had been unaware of previous days but this time had been alerted by some timely internet advertisements.  My local police department had a collection site so I collected up a bunch of my expired prescription drugs and took them in.  This seems like a good idea.  The DEA is primarily concerned about controlled substances (and I did have some unused painkillers) but expired drugs can also become dangerous.  I had not taken this possibility too seriously and have sometimes ignored expiration dates but in collecting my unused prescriptions I saw in one case the pills had undergone some chemical reaction that had cause them to split open and when I (foolishly) opened the pill bottle to take a closer look I was greeted with a pungent odor. Obviously no one in their right mind would take these pills but it seems likely that pills can become dangerous in less obvious ways.    

VOO VOO VOO

The stock market has done pretty well this year.  The S&P 500 Index closed at a record high on several days in July and last Friday, August 5, 2016, closed at 2182.87 up 6.8% for the year and at another record high.  This was of interest to me because as a result my investment in the Vanguard S&P Index ETF (VOO) passed a personal milestone as the fund closed above 200 (at 200.17) for the first time.  I bought this fund at the end of 2012 with some of the proceeds from the forced sale of most of my IBM stock.  This has worked out well for me as the fund is up over 50% while IBM has struggled.  Even with its recent recovery IBM (currently at 163.50) remains well below my selling price (around 190).  Good luck doesn't hurt.

Speaking of luck, the cancer drug, Opdivo, made by Bristol-Meyers Squibb (BMS) recently failed a clinical trial.  Opdivo is a rival to Merck's cancer drug, Keytruda.  As a result BMS fell almost 16% on Friday while MRK was up over 10%.  There is some reason to doubt whether this is really good news for Merck as the drugs are similar and the Opdivo trial probably failed (while a recent Keytruda trial succeeded) because Bristol-Meyers Squibb had aggressively enrolled a diverse group of patients while Merck had prudently limited its trial to the patients most likely to be helped.  So Keytruda may gain share against Opdivo but in a smaller market.  Nevertheless I am glad I own Merck stock and not Bristol-Meyers Squibb stock.    

Procedure Codes

Back in March I went to the dentist for a routine cleaning. A week or two later I was reimbursed by my dental insurance (after my dentist submitted the claim directly). I noticed that as usual the insurance paid most but not all of the bill but otherwise paid little attention. I went back to the dentist in October for another routine cleaning. This time I paid a bit more attention when my reimbursement check arrived (because coincidentally dental insurance reimbursement rates had recently come up in conversation) and noticed it was more than the earlier check. My first thought was that my insurance company must have raised its reimbursement rates. This was a small part of the explanation but examining the respective explanation of benefits statements showed that most of the difference was because in March I had been reimbursed for procedure code D0190 (screening of a patient) whereas in October I was reimbursed for procedure code D0120 (periodic oral evaluation) which my insurance covers for a larger amount. (In both cases I also was reimbursed for procedure code D1110 (adult cleaning)). So my next thought was that my dentist had coded my claim suboptimally (from the point of view of maximizing insurance reimbursement) but my March bill showed the D0120 code and when I went into the dental office a couple of weeks ago with my bill and the insurance statement of benefits they insisted the insurance company would have received exactly what was on my bill. But they also offered to try and straighten things out. And Monday I duly received an additional reimbursement check from my insurance company.

So what happened? This is a bit puzzling as it seems everything should have been handled by computer with little room for human error given that the original entry into the system was done correctly as it appears it was. It seems unlikely that MetLife is randomly recoding procedures (to reduce reimbursements) and hoping nobody notices. I suppose a short lived computer software bug is the likeliest explanation but who knows. In any case when receiving explanations of medical benefits it seems it can pay to take a moment to compare the procedure codes to those on your bill from your provider.

Obama's Lie

Over the years President Obama has made many statements to the effect that if you liked your current health insurance plan you would be allowed to keep it under his plan.  It is now obvious that these statements were incorrect.  Moreover I think it is fair to characterize them as lies.  First the blanket nature of the statements was unrealistic, even with the best intentions it is hard to make major changes in the health care system while preserving for everyone an option to continue with their existing plans.  Second and more importantly it was always a fundamental part of Obama's program that healthy and unhealthy people would pay the same rate for health insurance even if their expected claims costs were vastly different.   This meant forcing everyone into the same new risk pools where they would pay a blended rate.  Allowing healthy people to keep cheap existing plans catering to healthy people was at odds with this objective.  As a result the Obama administration didn't make a sincere good faith effort to allow as many of these people as possible to keep their existing plans (and thus stay out of the new risk pools).  Instead they wrote regulations that intentionally made it difficult for existing plans to qualify for exemptions from the law's new requirements.  As a result millions of people in the individual health insurance market are now being forced to find new plans regardless of their wishes contrary to Obama's repeated assurances that they would have the option of keeping their existing health insurance.  This was planned and not some unanticipated accident.  So it is hard for me to see why Obama's false statements shouldn't be called lies.

Of course politicians in general lie a lot so this is not some unique sin of Obama's.  He was not the first American President to lie to the American people and he won't be the last.  One of the (many) things that irritated me about President Carter was his claim that he would never lie.  In my view a more honest man would have pledged to try to minimize his lies which Carter was failing to do every time he pledged never to lie.  In any case just because many politicians have lied in the past and will lie in the future doesn't mean they shouldn't pay a political price when caught.  It appears Obama is paying such a price and he deserves to.  If he and his administration had devoted less effort to selling their plan politically and more to developing a sound and workable (which probably implies less ambitious) plan they and the nation would be better off today.

Flu Shot

I got my annual flu shot last Saturday.  They have started offering a version with a shorter needle.  I tried it last year but it didn't seem any less painful, if anything it was more painful.  So this year I reverted to the standard shot which was fine.

Health insurance vrs life insurance

The issue arose in comments as to whether the fact that the individual health insurance market doesn't work very well is a sign of economic inefficiently. Not by itself. Something is considered economically inefficiently only if there is a better way of doing it. While there are probably numerous ways the individual health insurance market could be made to function better, many of its problems are fundamental. Health care and insurance are just not a very good fit.

In my view the ideal insurable risk has the following features. There is a small risk of a large economic loss. The loss while large is strictly bounded. Most losses are total. It is clear cut whether the loss has occurred. Losses are easily computed and paid off in money terms. Losses are difficult to fake or arrange. Losses for different people occur independently. The true risk can be easily and accurately determined. The true risk is largely independent of whether the individual is insured. The insured individual does not have a significant advantage (compared to an insurance company) in determining the true risk. The true risk itself behaves predictably over time. It is possible to charge rates which reflect the true risk.

I think it should be fairly clear why these are desirable features. For example insured individuals and insurance companies don't trust each other. So the fewer things to argue about the better. Hence it is desirable that losses be rare and clear cut.

It should also be clear that individual health insurance (particularly as currently provided) is not a very ideal insurance product by these criteria. Life insurance on the other hand scores better. So it should be no surprise that the life insurance market functions better.

Health care costs

I was asked in comments what I meant by my claim that health care costs too much in the the United States. Basically I mean health care providers are paid more than is justified by the services they provide. This overpayment has several causes. Inefficient provision of services, provision of services of little or no real value and overpayment of health care workers like nurses and doctors. This is relative to other advanced societies. See for example figure 4 in this source . The United States spends more (as a share of gdp) than other rich countries on health care but does not achieve notably better outcomes.

Health care and equity

As I see it there are two equity issues with health care. What extra health care assistance, if any, the government should provide to the poor and/or the chronically ill? In both cases I believe some assistance is reasonable but that it should not be an unlimited entitlement.

Poor people have less ability to buy lots of goods and services, food, clothing, housing etc. I don't see why health care should be any different. It may be reasonable for the government to provide a floor but I don't see any reason everybody should be entitled to the best possible health care any more than they are entitled to the best possible food or housing. And I think people should have the same freedom to spend more or less on health care that they have for spending on other things like clothing or cars.

My thoughts about the chronically ill are similar. People are fortunate and unfortunate in many ways and I don't think it is the job of government to attempt to compensate for all misfortune. Particularly when this is an open ended entitlement that can be impossible to fulfill no matter how much is spent. There are many chronic medical conditions that can be alleviated but not cured. I think some government assistance is reasonable for people with costly medical conditions but that it should be subject to a cost-benefit analysis and limited to cases where substantial benefit for reasonable cost is possible. My thoughts here are similar to my thinking about education for "special needs" children. In some cases school districts end up spending more on a single "special needs" child than 100 normal children. I don't think such disproportionate spending is reasonable and I don't think it is reasonable in the case of medical care either.

Note medical care is subject to decreasing marginal returns. In other words the more you spend the less each additional dollar will buy in terms of increased quality of life. So cutting medical spending does not affect outcomes much when you are in the flat part of the curve as we are.

Health care reform passes

Although I had thought it was dead, the Democrats this week managed to pass their health care reform package.

I don't like the bills as they basically establish a massive new welfare entitlement program. I don't like welfare in general and this is a particularly inefficient form of welfare as most of the benefit will accrue to the health care industry rather than to the poor, who given a choice would largely spend the money on other things. In my view the main problems with health care in the US are that it costs too much and that it is over utilized. The bills will make both of these problems worse.

Some Republicans have been whining about the process by which the bill was passed which seems silly to me, given that the Democrats have significant majorities in the Senate and House and control of the White House, it is reasonable that they should be able to pass this package, wrongheaded as it may be. And one should remember it was the Republicans disastrous performance when they were in control which directly led to the current Democratic majorities.

Also much of the Republican opposition seemed off point to me. If you accept that no American should ever be denied any health care treatment because of cost it is hard to construct a plan that doesn't have most of the problems of the Democrat's package. Hence Romney's embarrassment over the fact that the program he helped establish as Governor of Massachusetts was not all that different. I don't accept the above principle but this doesn't appear to be a position that politicians are willing to argue.

Autopsy

Perhaps health care reform is not quite dead but additional delays are likely to be fatal. I believe Yglesias is correct that the sudden collapse of support is a sign that many Democrats were not very enthusiastic about reform. Hence the lack of urgency and delays chronicled in this TPM timeline . Support for reform in general has always been greater than support for any specific reform proposal making it easy to underestimate how difficult it will be to pass a specific proposal.

Individual mandate

Apparently the most unpopular part of the Democratic health care reform proposals is the individual mandate. Kevin Drum claims:

And the least popular feature? The individual mandate, by a landslide. It's even less popular than the $900 billion cost, which is pretty remarkable. Unfortunately, the whole plan falls apart without a mandate, so there's not much we can do about that. Just learn how to explain adverse selection to your relatives when you're trying to sell them on the plan, OK?

However it would be easy to devise plans without an individual mandate. The requirement for a mandate is the consequence of the following liberal beliefs about health insurance.

1. Everybody should be covered.
2. Everybody should pay the same rate.
3. Everybody should receive the same, gold plated, coverage.

The primary reason liberal plans have a mandate is that liberals want everybody to be covered whether they want to be or not. Without a mandate some people will choose not to buy insurance. The number of such people is greatly increased by incorporating the other liberal beliefs in designing plans. Charging everybody the same rate means some people are being greatly overcharged making them more likely to want out. Similarly some people who would voluntarily buy cheap insurance will balk at being forced to buy expensive gold plated plans.

There are numerous ways to encourage people to voluntarily buy insurance compatible with basic economics. Such plans would not lead to everybody being covered but neither will a plan that can't get through Congress.

Post-mortem

In the aftermath of the Republican victory in the Massachusetts Senate special election health care reform (HCR) appears in deep trouble. Many Democrats were never very enthusiastic about HCR but didn't want to openly oppose it. Hence its long and tortuous path through Congress to date. But it is hard to see a path to passage at this point although a simulacrum of life may remain for while as no one wants to be the one to declare HCR officially dead. Of course I have been mistaken before about HCR's chances.

If HCR does fail this will be pretty bad for the Democrats. In my view it was a mistake for the Democrats to make HCR their main priority. They would have been better off passing some incremental changes (like extending COBRA) while concentrating on the economy and financial reforms. Unfortunately it will be difficult to change course at this point. They have thrown away a lot of political capital for nothing and the window for passing strong financial reforms may have passed. This would have been easiest accomplished at the height of the crisis when the banks needed government help to survive. Now the administration has no leverage. Nor do they seem all that determined, perhaps because Obama just isn't that interested in the economy.

Senate passes heath care bill

My prediction that health care reform was about to go down in flames proved incorrect as the Senate passed a bill on a party line vote. Of course there are still ways for final passage to elude the Democrats but I didn't expect them to get this far.

Perhaps an example of seeing the world as you wish it to be as I was rooting against them. There are problems with our health care system but in my view the current reform bills will just make matters worse. They do nothing to reduce costs, in fact they are likely to increase them substantially with little benefit. So ultimately they are mostly just a giant gift to the medical industry which is already consuming an unreasonable proportion of the nation's resources.

Health care reform prediction

The health care reform political battle seems to be approaching a critical point. My prediction is that it is about to go down in flames. But I could be wrong. We should know soon.

New York mini-COBRA update

As I noted here New York has expanded their state COBRA law to grant 36 months of coverage in some cases. Unfortunately it appears this does not apply to me but not for the reason I was worried about. As the FAQ explains the law does not apply to self-funded (as opposed to fully insured) plans. The difference is explained here which notes in part:

Self-insured plans are subject to federal regulations, while fully-insured plans are regulated by the state in which the plan operates. This exempts MSU from providing for state-mandated benefits in our plans (which can be costly) and from paying state-mandated taxes on health care premiums (an additional expense for the plans).

I expect IBM's thinking is the same as MSU's and all their plans are self-insured. The benefits person on the phone said the law didn't apply to IBM and this seems like the most likely reason. And I really can't complain, New York's legislature is basically completely owned by the health care provider lobby and state regulated plans are likely much more expensive. Prices in the individual market seem to be ridiculous. Fortunately IBM has retiree plans that I can go into as an alternative which are more expensive than the employee plans but still better than the New York individual plans.

Convenient falsehoods

I have been reading Obama's other book "The Audacity of Hope". It is pretty heavy going and I haven't finished yet. However I have completed chapter 5 "Opportunity" which contains some policy discussion. I disagree with much of it which doesn't mean too much as Obama and I have different priorities. What is more disturbing is that Obama seems to have difficulty critically evaluating proposals which appeal to liberal prejudices but won't actually work.

Obama uncritically supports ethanol on pages 169-170. Corn based ethanol is a good example of something which is superficially appealing but doesn't actually advance environmental priorities.

On page 161 Obama claims "... Recent studies show that the single most important factor in determining a student's achievement isn't the color of his skin or where he comes from, but who the child's teacher is. ...". Obama doesn't cite these studies so I can't specifically address them but this statement is contrary to numerous other studies that show the most important factor achievement in student achievement is the characteristics of the student and the next most important is the characteristics of his classmates. The quality of his teacher (within the range commonly found in American schools) hardly matters.

Finally on page 177 in discussing health insurance Obama claims "... The bigger the pool of insured, the more the risk is spread, the more coverage provided, and the lower the cost. ...". This misunderstands how insurance works. Pooling costs spreads them more equally but it doesn't reduce them. Pooling a bunch of high risks doesn't make them low risk or low cost.

This inability to recognize well intentioned nonsense won't matter too much if Obama appoints good advisers to handle the details. And Obama would hardly be the first President to be a big picture guy. Still Obama is the President we have at the moment and I would prefer a President with a better BS detector.

Co-Pays

My former employer has announced that it is dropping co-pays for visits to primary care physicians. Since I am still in the plans under COBRA I expect this will apply to me as well. The stated reason is to reduce health care costs which makes no sense to me. I really doubt the co-pays were causing a significant number of employees to turn minor problems into major problems because they were too cheap to go to a doctor when needed. Eliminating co-pays for colonoscopies might make more sense but even there the ick factor is probably a bigger deterrent than the cost.

The move does make sense as a way to reduce taxes as co-pays are paid with after tax dollars while employer paid benefits are not taxed. Perhaps presenting it as a measure to improve care is better PR.

Health reform nonsense

Young drivers are more likely to get in auto accidents. As a result they pay more for auto insurance. No one seems to think this is outrageous.

On the other hand young people are less likely to require expensive medical care. But for reasons that baffle me, many of the people backing health reform think it would be terrible if young people got a break on rates for medical insurance. It appears the Baucus plan contains a provision to allow young people to pay lower rates. Timothy Noah is annoyed . Apparently in his view treating young people fairly constitutes "pandering". For

Everybody else gets screwed ...

In Noah's world it is unfair to require people to pay fair rates. This is connected to a common liberal misapprehension about insurance.

... Insurance, after all, works only to the extent that it can spread risk among a diverse population. ...

This is completely wrong. Insurance works just fine with homogeneous pools. The purpose of insurance is to hedge against future bad luck. There is no need for good risks to subsidize bad risks. There is no reason for people in California to be forced to buy tornado insurance to reduce rates for people in Kansas or for people in Kansas to be forced to buy earthquake insurance to reduce rates for people in California.

The liberal fetish for community rating (charging everybody the same rate) for medical insurance makes their plans difficult to implement as it means there will be a large group of people who are being overcharged and who will look for ways out. Allowing them to leave will set off an adverse selection death spiral but forcing them to remain will be complicated and unpopular.

Even just allowing rates to vary by age and sex would considerably reduce the mismatch between rates charged and actual risk and alleviate the above problem. But this appears to be anathema to the reformers.